Day grew up in Montreal and in Ottawa, where he attended high school. He then lived in a number of other provinces and held various jobs, including work as a deckhand on a trawler and as an administrator of a religious school. He briefly attended the University of Victoria, British Columbia, and became a lay minister in a Pentecostal church. Beginning in 1986, he represented the town of Red Deer in the Alberta legislature, and he held a number of cabinet positions in the Progressive Conservative provincial government. During this time he helped enact a number of policy shifts, including a reduction in government expenditures, a single-rate income tax, and welfare reform.

On March 28, 2000, Day announced that he would enter the race to head the newly formed Canadian Alliance, advocating positions that combined traditional and religious conservatism. He proposed a reduction in the role of the federal government, limiting it to national defense, foreign affairs, monetary policy, and the regulation of financial institutions, trade, and criminal law. He also advocated a looser federation of provinces, an arrangement that he believed could accommodate Quebec separatists.

The Canadian Alliance succeeded the Reform Party, founded (1987) and headed by Preston Manning, and most observers presumed that Manning would assume the leadership of the new party. However, the younger and more charismatic Day captured the imagination of the membership, and in a runoff election on July 8 Day won 63 percent of the votes. He quickly moved to close ranks with Manning supporters, and on September 11 he won a seat in Parliament from a riding (electoral district) in British Columbia, thus becoming leader of the opposition to the Liberal government of Prime Minister Jean Chrétien. Day remained the leader of the Canadian Alliance for two years, then stepped down and called a leadership race. Day lost the leadership fight to Stephen Harper in 2002, but he pledged his support for the new leader and was appointed foreign affairs critic. In 2006, when Harper became prime minister, Day was made minister of public safety. In 2008 he became minister of international trade and minister for the Asia-Pacific Gateway, and two years later he was appointed president of the Treasury Board. However, Day decided not to run for reelection in 2011, and he stepped down from both Parliament and the Treasury Board that year.

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